Putin says oil wars with Russia will make West bleed

Opportunities for the West to hurt the Russian economy are limited, President Vladimir Putin said Thursday. Europe cannot stop buying Russian gas without inflicting pain on itself, and if the US tries to lower oil prices, the dollar will suffer.

If the West tries to damage Russia’s influence in the world
energy market, efforts will likely backfire, the Russian
President said during his twelfth annual televised question and
answer session.

To really influence the world oil market a country would need to
increase production and cut prices, which currently only Saudi
Arabia could afford, Putin said.

The president added he didn’t expect Saudi Arabia, which has
“very kind relations” with Russia, will choose to cut
prices, that could also damage its own economy.

If world oil production increases, the price could go down to
about $85 per barrel. “For us the price fall from $90 to $85
per barrel isn’t critical,” Putin said, adding that for
Saudi Arabia it would be more sensitive.

Also the President said that being an OPEC member, Saudi Arabia
would need to coordinate its action with the organization, which
“is very complicated.”

Meanwhile, Russia supplies about a third of Europe's energy
needs, said Putin. Finland, for example, is close to Russia
economically, as it receives 70 percent of its gas from Russia.

The US shale industry has boosted domestic production, but
President said that the so-called "shale revolution" was
expensive and not quick to come.

Russia’s economy largely relies on energy. In 2013 more than 50
percent of the national budget was funded by gas and oil
revenues. The main revenue comes from oil, as last year, oil
revenues reached $191 billion, and gas $28 billion.

“Oil and gas revenues are a big contribution to the Russian
budget, a big part for us when we decide on our government
programs, and of course, meeting our social obligations,”
the president said.